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Tuesday, August 26, 2008

I found this NY Times article on the IRS's income distribution data, "Average U.S. Income Showed First Rise Over 2000," very confusing--and analyzing income distribution statistics is part of what I do for a living! First of all, it's unclear whether the changes over time mentioned in the article are adjusted for inflation or not. Second, the article doesn't explain that these figures are for households (actually tax filers), not individuals. Third, it's all just a jumble of numbers. A graph, a graph, my kingdom for a graph!

For the charts below, I used the user-friendly version of the IRS data from Emmanuel Saez's webpage (specifically, Table A6, which includes capital gains income in the numbers.)

Here are percentage income changes for the bottom 90% and the top groups. I've labeled the bars with the raw changes (in 2006 dollars):

This graph shows just the raw changes:

So, for the bottom 90%, average household incomes were $1410 lower in 2006 than in 2000, while people at the top--especially at the very top--have seen their incomes continue to climb through the Bush years.

Emmanuel's tables don't show a detailed breakdown for the bottom 90%, but I gather from the numbers in the article that incomes have declined on average for household with incomes of less than $75K (61% of households, according to IRS figures). So, the headline for the article could have been "Income Has Fallen from 2006 Level for Lower 60% of Households"

Click here for my on-the-ground coverage from Denver of the Democratic National Convention.